Ford were mighty relieved when it managed to off-load it’s British marques, Jaguar and Land Rover, to Tata. Now after 1 year and 9 months of ownership, causing the normally profitable Tata Motors to fall into a £41 million pound loss and falling sales, how do you think Tata are feeling about the purchase of JLR? Sad? Depressed? Suicidal? According to steelguru.com, Ratan Tata is surprisingly optimistic.

If we assume that the global meltdown is a phenomenon that will be over in the near term, I think we will look back and say that these are very strategic and worthwhile acquisitions. There were many questions raised regarding whether these two large acquisitions Corus and JLR are worthwhile and whether the prices were right in terms of being at the top of the market, virtually. My view on that is that if you want to buy a house and that house is of a particular value, then it may not be there if you wait

I hate to break it to him, Jaguar Land Rover wasn’t a house in Belgravia, but a flat in Moss Side. But despite the toxicity of Jaguar Land Rover which is apparent to everyone except Ratan Tata, he still carried on optimistically saying that buying the company gave Tata “international brands” which would have taken years and billions of dollars to establish. Casually, omitting that Volvo, was also up for grabs, too. He then, laid out his plans for the marques in India.

“We have one retail outlet in the country and it is just imports against orders. It will never be the same until we look at another phase where there would be assembly in India, which in turn will depend upon the interest level and the ability of JLR to make that commitment to invest in India.”. The article finishes with this quote “I think JLR would at present moment continue to just look at importing to India and look at improving and securing its position in the territories in which it is strong.”

Was that a thinly veiled threat to management in the UK to pull their socks up? I don’t doubt that Tata Motors have a long term view of Jaguar and I believe their sincerity to restore the brands to their former glories. However, I wonder whether Tata simply do not grasp the monumental task in front of them. Maybe this bravado is for show? I just don’t want my favourite car company to be consigned to the history of books along side Packard, Studebaker, Pontiac, Saturn and Oldsmobile.

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7 Comments on “Tata Defends JLR Acquisition...”

I have a ton of respect for Mr. Ratan Tata, but his Jaguar remarks are wishful thinking and whistling in the dark. Jag and L-R could not make a dime well before the financial crisis. Their reliability problems are horrendous. There are far, far better alternatives out there for most drivers. It is highly unlikely they will be any better under Tata. The best thing for Ratan Tata is to try to make a bundle from his excellent NANO, and use Jag and L-R as tax losses or writeoffs.

It seems you’re misinformed. LR was profitable in recent years until the financial crisis hit in ’08. That was offset by Jags losses, but worth pointing out.

In terms of reliability, they are far from horrendous. In fact if you consider popular statistical rankings relevant, Jaguar stands at the top of the pack , a pack that is on the whole extremely reliable with vary little variance from best to worst, so even lower ranking LR is quite a solid brand, especially considering how complex they are relative to a typical passenger car.

I wonder if SAIC is still intrested in the Rover moniker, Tata may be able to sell that. They probably could sell Land Rover and Jaguar to GM, once GM drops the “we’ve changed” facade and goes back to buying nameplates for marketshare. Then (perish the thought) we can have rebadged Buicks and Chevy SUVs as Jaguar’s and Land Rovers.

If Ford hadn’t bought (and invested heavily in) J/LR, it would have been consigned to the history books long ago. In an interview, Jac N. indicated that, unlike with Ford’s acquisition of LR from BMW, in purchasing J, Ford did no due diligence since J was a basket case … basically being told: “this is the price, take it or leave it.” (GM, on the other hand, in losing out to Don Petersen et al., made lemons out of lemonaide by toddling off and buying SAAB from the Wallenbergs.)
Since then, J/LR have new products, a good-supply base, competitive components (engines, etc.), a decent dealer network … perhaps Mr. Tata will be able to make a go of it, his hand is arguably stronger than the one Ford bought in (ca.) 1990.

Whilst I think Tata could have got JLR for less money had the recession hit earlier. I do think that both brands are very smart long term investments. For a start it’s easy to overlook a few key facts. Firstly JLR were making solid profits before the recession hit (that’s why TATA paid an arm and a leg for it in the first place). Secondly Jaguar is very much a brand on the rise. The XF has been a sales hit and the XJ is receiving a lot of advanced orders.

Then there is Land Rover. They have the baby hybrid Range Rover about 1 year away from launch and in Western Europe that will be a monster hit, just like the RR Sport was when that was launched (RR Sport increased Land Rover sales by over 40% at the time). Land Rover sales have been hit hard by the recession but now that’s coming to an end their sales are rising as fast as they were dropping.

JLR will get back to profit very soon. And for those of you who think they should have bought Volvo, well why? Their cars are old fashioned and their margins/ sales figures are awfull. At least JLR operates with high profit margins and it has a much better range.

Also has JLR always been a basket case? How often did Land Rover ever lose money under BMW and Rover? (they were called the Jewel in the crown for a very good reason). As I recall their profits have only ever been dragged down by Jaguar and even that’s on the mend. And don’t forget before Ford bought Jaguar the XJ was a best seller.

Yes Ford blew a fortune on JLR. Which was mostly spent fixing Jaguar’s run down factories. But now Ford have spent the money, TATA will benefit.

The photo says it all. The man from Jaguar can’t stop laughing. The man from Ford looks extremely relieved. They both look like they have just had a huge burden lifted from their shoulders. All that the Tata guy can manage is a phony photo opportunity smile.